3rd ICAI 2024

International Conference on Automotive Industry 2024

Mladá Boleslav, Czech Republic

such as property, plant, equipment, inventory, and receivables. A higher assets turnover ratio suggests that the company is effectively utilizing its assets to generate revenue, while a lower ratio may indicate inefficiencies in asset utilization. Analyzing the assets turnover of selected companies over the last ten years (see Figure 2) provides insights into their operational efficiency and resource management. Similarly like by the operating margin above, the Volkswagen Group and Toyota Motor Corporation show positive and relatively stable development, whereas by Tesla considerably improves over time.

Figure 2: Assets turnover of selected companies in the last ten years

Source: Authors’ calculations based on Macrotrends (2024a, 2024b, 2024c) The equity multiplier, also known as the leverage ratio, measures the proportion of a company’s assets that are financed by its shareholders’ equity versus debt. It is calculated by dividing the total assets by the shareholders’ equity. A higher equity multiplier indicates a greater reliance on debt financing, while a lower ratio suggests a higher proportion of equity financing. By examining trends in the equity multiplier and the return of equity (ROE) of the past decade (see Figure 3 and Figure 4), in particular Tesla stands out by substantially lowering its leverage ratio and becoming profitable over time. And it was precisely this shift from debt to equity financing that was enabled by Tesla’s surging profitability. Toyota Motor Corporation maintains the most stable financing model and profitability. Volkswagen remains profitable with the exception of 2016 due to Dieselgate. Figure 3: Equity multiplier of selected companies in the last ten years

Source: Authors’ calculations based on Macrotrends (2024a, 2024b, 2024c)

31